Institutional Players Load up on Stocks

September 2, 2008 (PLANSPONSOR.com) - A new
Conference Board study of data from the largest 1,000 U.S.
companies found institutional investors have substantially
increased their equity holdings to an unprecedented average
76.4% of corporations by year-end 2007.

Further, the equity market value of total
institutional equity holdings increased from $571.2
billion in 1980 (or 37.2% of total U.S. equity markets)
to $12.9 trillion (or 66.3% of total U.S. equity markets)
in 2006.

According to the Conference Board, pension funds
continue to account for the largest block of
institutional investor assets, with $10.4 trillion or
38.3% of total 2006 assets under management. Within the
pension fund category, state and local pension funds have
grown more rapidly than other types of pension funds.
Moreover, these state and local pension funds have also
been growing more rapidly in the amount of assets they
allocate to equities from bonds and other types of
investments, the Conference Board said.

Public pension funds have increased their share of
equity markets from 2.9% in 1980 to 10% in 2006. By
comparison, private trusteed pensions (generally
corporate funds) represent a smaller share of equity
markets in 2006 than they did in 1980 - declining from
15.1% in 1980 to 13.6% in 2006.

Historically, U.S. pension funds put very little of
their assets into international equities. This amount
grew, however, and the largest 25 internationally
invested U.S. pension funds put 18% of their 1999 assets
into international equities. By 2005, this amount had
declined to 13.5 % of their assets, although the number
rose to 15.3% for 2007, the report said.

As of September 2007, $1.8 trillion in assets was
estimated to have been managed by about 10,000 hedge
funds worldwide. This represents an increase of 23.6% in
hedge fund assets and 5.8% growth in the number of funds
since 2006. Of these, more than half are domiciled in the
United States.

The report shows the largest 200 U.S. employee
retirement plans with defined benefit assets in hedge
funds. The amounts invested in hedge funds by these
pension funds rose to $76.3 billion for the year ended
September 30, 2007.